State Farm announced that it is testing out blockchain technology to streamline the subrogation process for auto claims.

Subrogation is the last part of the claims process, where an insurance company recovers costs it paid to its customer for damages from the at-fault party. State Farm explained it is working with a partner in the insurance industry to test the blockchain solution against existing processes.

“Today, subrogation is a relatively manual, time-consuming process often requiring physical checks to be mailed on a claim-by-claim basis between insurers,” Mike Fields, innovation executive, State Farm, said in a press release. “You can imagine the time and resources required to complete these transactions.”

The company will test the blockchain solution to find out if it can potentially reduce the time needed to complete the subrogation process by compiling all payment amounts, netting the balance and facilitating a single payment on a regular basis between insurers.

“The blockchain solution we are working on has many potential benefits,” said Fields. “It helps us automate a manual process securely and creates a permanent transaction record of each payment, which can easily be verified for accuracy. It also has the potential to decrease the amount of time for consumers to receive their deductible reimbursement.”

A company spokesperson told CoinDesk that around $11 billion in claims were transferred due to subrogation last year, with $750 million dealing with private passenger insurance claims. The spokesperson added that blockchain could reduce the risk of error in processing a claim, as well as decrease the number of paper checks sent from one insurance company to another.

The test will run through the first half of 2019. Innovation Manager Dustin Helland noted that “the results of the test, along with other factors, will be input for a decision on whether or not to launch the solution into full production adoption.”